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Auckland's residential real estate transactions churned faster in 2021 with more sales and higher prices, ending in December with robust demand. Less than 6% of all houses sold in the year but they set the market expectations

Property / news
Auckland's residential real estate transactions churned faster in 2021 with more sales and higher prices, ending in December with robust demand. Less than 6% of all houses sold in the year but they set the market expectations

Auckland's dominant realtor Barfoot & Thompson has reported good sales levels in December to end the year. 911 properties were sold by them in the month, above the 865 average for the past ten years, but well below the 1479 sold in December 2020.

Their median sales price was $1,235,000, a slight -$5000 lower than for November.

Buyers do not seem deterred by these high prices - 255 of the 911 December transactions (28%) were for properties that sold for more than $2 mln.

Barfoot's Peter Thompson said that "the market took news of rising interest rates, tighter bank lending criteria and changes to investor taxation restrictions in its stride, with strong buyer interest right up to Christmas Eve."

This caps a year where Auckland's residential property market seemed to be immune to the pandemic. Barfoots sold 13,429 properties in the year, +12% more than in calendar 2020, which in turn was +28% higher than in 2019. Lockdowns and closed borders have proven friendly to these real estate churn markets.

That churn, aided by low interest rates, had an even more dramatic effect on selling prices. Median prices achieved by Barfoots rose from being flat in 2019 from 2018, to up +16% in 2020, and up another +23% in 2021. The liquidity gifts from the RBNZ and Treasury meant that it was hard to fail as a real estate agent.

But not all of Barfoot's listings sold. In fact, 5744 of them didn't, an average monthly drop-out rate of 14%.

  Listings
at start
New
listings
Sales Dropped
out
Listings
at end
Drop-out
rate
31-Dec-20           2,938  
Jan-21 2,938 1,378 1,086 99 3,131 3.4%
Feb-21 3,131 1,941 1,124 532 3,416 17.0%
Mar-21 3,416 2,138 1,844 316 3,394 9.3%
Apr-21 3,394 1,675 1,107 627 3,335 18.5%
May-21 3,335 1,502 1,197 518 3,122 15.5%
Jun-21 3,122 1,485 1,243 500 2,864 16.0%
Jul-21 2,864 1,349 1,235 349 2,629 12.2%
Aug-21 2,629 1,258 1,020 266 2,601 10.1%
Sep-21 2,601 977 666 185 2,727 7.1%
Oct-21 2,727 2,012 814 884 3,041 32.4%
Nov-21 3,041 2,724 1,182 650 3,933 21.4%
Dec-21 3,933 948 911 324 3,646 8.2%

That drop-out rate was marginally higher than the 13% in 2020 and 2019.

The listing drought is also fading, although Barfoots starts 2022 with 3646 available listings, up sharply from 2020 but well below the 4194 at the start of 2019.

There are about 590,000 dwellings in Auckland, based in Auckland Council 2018 estimates, and updated with subsequent building completion certificate data. In 2021 about 33,000 dwellings will change hands in this churn. That is just a 5.6% selling rate, small, but it is these few transactions that set the overall market 'price' levels.

 

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40 Comments

Apologies for setting this article up with Comments turned off. They are 'on' now.

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1

Barfoot's Peter Thompson said that "the market took news of rising interest rates, tighter bank lending criteria and changes to investor taxation restrictions in its stride, with strong buyer interest right up to Christmas Eve."

What ever Peter is on, I want it to or this is a script from way back. I have been watching all the auctions not just barfoots from middle of November and as soon as December hit sales results/auctions were getting worse and worse to a point that everything was passed in including "right up to Christmas Eve". Properties may have sold after, none in the area I have been watching so far but vendors would have been accepting amounts lower than what they were expecting if they had sold.

He is in la la land if he thinks the CCCFA has not affected the market and to the lesser extent higher interest rates. It took me nearly a month to get my loan application approved, that is an auction cycle of a house being on the market. The amount of questions and nitpicking ANZ went back and fourth was unbelievable but I know their hands are tied for now. CCCFA will continue to put the brakes on lending and not just housing, all lending.

Does anyone know or have the stats/trend in terms of average time houses stay on the market for? Would be interested to see what it has been over the last 5 - 10 years and what it currently is and then see what happens over the next year. I think the CCCFA will push out the time it takes to sell a house perhaps longer than the average time was 5 years ago (only because the last few years houses have been selling with no trouble at all).

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10

Real estate agents from the most expensive agency (sounds like Hayleys) have properties being advertised online but do not answer calls or respond to texts. Talk about poor customer service for both vendors and buyers alike. Surely they could arrange someone to answer calls and send out info or another agent to cover. They do not even provide dates of when they will be back in office. We know politicians are useless workers however they pop up from time to time when need be.

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2

I find that if you email the boss (sounds like John Bayley) and tell him what a crap job his agents are doing, you will suddenly get multiple contacts from management down to the listing agent.

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1

Volume down almost 40 percent yoy hence a good reason why values are also down... desperate sellers fleeing!

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7

Wrong. Homes.co.nz threw me another $10K for the month of December. The market should flatline from here but don't hold your breathe. Nothing surprises me anymore with housing, could just keep pumping through 2022. 

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5

Will you ever sell the house Carlos, if not what does it matter what is the value. It is a home until it comes time to replace then do the research. My opinion, no offence intended

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7

You have probably had another agent selling nearby upping the estimated value which drags up all around. Homes.co.nz values are about as reliable as Jacinda Ardern is truthful.

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5

... or real estate agents are truthful for that matter.

Speaking of which, this is quite a brilliant resource to find out what the hidden price is for a listing on TardMe - https://propertyprice.co.nz/

For extra giggles it can be used to ask the agents awkward questions about the price they entered being "truthful" or "honest" with the "vendors expectations".

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7

Agents are required under REAA 2008 to provide the vendor with a market analysis and valuation. As a buyer, If you ask them what it is they clam up. The best they will do is a trumped up value that you know is way under the vendors expectations. The whole auction process is a sham however I still prefer it to some of the other methods 

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4

How many other methods are there?

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0

Thanks for that link Brock. Interesting.

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3

Mines up another 40k also. 
 

Bought a year ago for 920 and homes estimate has it at 1.24. 

I’d be furious if I’d stayed renting as everyone on here is. 
 

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4

As if everybody had a choice.

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9

Take a screenshot because it will be nice to reminisce when its 920k again in a few months.

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2

Ah yes, silly me. I should have just magic'd up the 180k deposit, borrowed $740,000 and purchased my first home. 

Repayments at $672 a week based on a 2.49% mortgage rate, is already well outside my budget. That's what I probably would have gotten if I'd purchased a couple years ago. I mean, I could 'afford' that if the banks squinted hard enough and if I lived like a nun.

What happens when that rolls over to the interest rates today? 2 years ago me would be having a heart attack right now. Repayments would go up to $774 at minimum ($3.6% 1 year fix) an extra $102 a week out of what would have already been a cut throat budget.....

How brave would I be? The news media seem to be talking about inflation like he's here to stay. Maybe the 1 year rate is a trap? Would I fix for 2 years at 4.3% some $842 a week. (Granted I have not accounted for previous repayments, so maybe round this down a bit. Let's say $820).

If I'd purchased $920k house on a special rate and was soon to refix I'd be a stressed out mess. Repayments would be soon to jump up an extra $100 to $200, and that's if I had a 20% deposit.... Heaven forbid if I'd gone in with 10% or 5%.....

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6

Yes super stressed. My mortgage costs me $460 a week and I have 1.5 more years with it at this rate. If it goes up a few hundred then so what. 

I would be far more stressed out if I was still renting watching the rents continue to climb and wondering when on earth I’d ever experience buying my own place. 
 

 

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1

If repayments are actually $460 then it isn't on a $740k mortgage. Someone borrowing that much would have to pay back more than $460 a week just to pay the principal off in 30 years. 

Assuming 2.49% for the rate, the mortgage must be for about $510k spread over 30 years. 920 less 510 gives a 410k deposit. 

Someone with 410k for a deposit is not in a position to comment on the average first home buyers experience.

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Absolute thieves. If ever there was a movie made you can guarantee the nz REA would be characterised as bloodsuckers searching the countryside for victims to drain

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10

Not surprising though is it really. Truly the most parasitic of occupations.

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8

Let’s face it. People only get into selling real estate because the thing they really wanted to do didn’t work out. 

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5

Property Brokers Limited received $1.9 million. No wonder he isn't commenting here, out spending the loot.

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4

And I'll just leave this here - https://www.reddit.com/r/Wellington/comments/rvqm01/lowe_co_asking_for_…

Some fascinating comments regarding Wellington's finest real estate agents (/s), Lowe & Co.

 

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3

Where's TTP et al to chime in on this, with his "words of truth" haha and back up these RE agents........ another complete waste of taxpayers money, so at the end of the day, like with so many things, we have to point the finger at the Government, who hand money out like "lolly water",  then are so weak and lazy, don't even bother to chase it up and account for it ....it's like, well it's not "my" money, so who cares ! .......ridiculous. 

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2

Interest is a reliable finance information site in NZ.

We expect that if the Auction rate falls to the ground it will be equally reported with same sentiment as when it went through the roof. 

But unfortunately, that is not the case and the article covers it up smartly, may be it's my understanding but that is what it seems and this makes readers lose faith in media overall.

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9

Was searching listed properties in Hawaii.... not a single one for auction or PBN. All, regardless of style, price or condition had an asking price, some were extremely pricey and others very cheap. I couldnt say if that is normally the case

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1

Flying high .....where in Hawaii were you searching for property ? ....I have been focusing on Maui and a 1 bdm apartment, north of Lahaina, but like everywhere else the cost of a good one has gone from $500 to $800 in about 3 years, so now out of my price range.... but I will still keep going there for vacations  ! :) 

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0

It's pretty incredible if house prices didn't drop (in any price bracket) given the dismal auction results in December. Perhaps the properties that didn't sell are still on the market and/or been withdrawn? It all seems abit too rosey...

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3

The housing market usually slows down prior to Christmas. There's just more people paying attention to the market these days. Hence more noticed this slowdown. Need to wait until March or April to know what changes (if any) have occurred.

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5

Auction sales rates in December were well down compared to previous years... It wasn't "BAU".

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5

this looks increasingly like a buyers market barfoots sales are dropping and building consents statistics say the market must sell 4000  new residences a month to stand still not happening only the rapid increase in bank debt holding market up but this 41.7 trillion dollar market looks pretty  toppy

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3

Well, well, well what I surprise. There are days I would like prices to drop just so Brock et all will not have anything to moan about. Property only game in town. Boosters on for another year of great gains to the portfolio. If you make smart decisions life can be easy. 

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4

Hi B727,

Is the smart decision right now to be buying or selling?

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1

Entirely dependent on ones personal finances. In your case, and that of other serial renters, you can’t sell that which you don’t own unfortunately. 

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5

I own a mortgage free property.

You look even stupider than usual.

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6

Wow that aus move has paid off already! 

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3

Correct.

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2

Brock

Sorry son - your posts above are not consistent with your numerous others. :)

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6

Yeah isn't being anonymous great, you can post all sorts of made up shit.

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